The document discusses key lessons that can be learned from digital titans about developing a digital strategy. It outlines 7 main lessons: 1) embrace the digital customer, 2) create digital replicas of physical assets, 3) pay attention to consumption ecosystems, 4) learn from agile experiments using APIs, 5) use digital engines like cloud computing and AI, 6) implement dynamic decision architectures, and 7) be part of an ecosystem rather than controlling resources. The document emphasizes that every company must become a digital innovator by learning from these digital strategies of major companies.

1. Digital Strategy: Learning
from the Digital Titans
Prof. Bala Iyer
@BalaIyer
April 22, 2017

2. Changing of the Guard
• Most theories and concepts taught today
come from studying companies in the
auto industry
• Entering the age of digital titans

3. Software is eating the world
• .. we are in the middle of a dramatic and broad
technological and economic shift in which software
companies are poised to take over large swathes of the
economy [Andreessen]
• Every company is a software company - ecosystem
• Software + Sensors + Connectivity  Transformation

4. Data Explosion!
• Every day, we create 2.5 quintillion bytes of
data — so much that 90% of the data in
the world today has been created in the last
two years alone.
• Trapped treasure trove

5. Digital Strategy
• Is an action plan that uses ecosystems, technology and information to
augment organizational/individual performance to achieve business goals.
• Delivering smart, adaptable and personalized products and services using
digital technologies
• Create novel, personalized digital experiences

6. Here come the Digital Titans
• Multi-billion dollar companies operating as
platform-based business models
• Have mastered the art and science of
managing the digital technologies
• Mastered the data asset and taken it into
different domains
• Multi-purpose platforms with wide
applicability

7. Incumbents in every industry feel the threat

8. Digital Titans are Commoditizing the
incumbents
Hardware
Software
Services
User
Conversational Commerce

9. What have the Digital Titans taught us?
1. Embrace the Digital Customer
2. Create digital replicas
3. Track consumption ecosystem
4. Learn from Agile experiments with APIs
5. Use digital engines
6. Implement dynamic decision architectures
7. Orchestrate an ecosystem

10. 1. Who is a digital customer?
• A digital customer is one who consumes smart products, or products that
have in-built sensors, information processing and connectivity capabilities. In
doing so, the digital customer generates information upon product use, and
enables third party access to that information [HBR, 2014].
• When effectively served, these digital customers add to novel informational
assets with regard to how products are consumed or used.

11. 2. What is a digital replica?
• Digital representation of physical assets owned by a company along with its
current state. The current state and environmental information is provided
by sensors that are embedded on the physical assets.
• Digital replicas allow companies to provide real-time monitoring, predictive
maintenance and other outcome based services.
• The digital thread provides the connection logic between the conceptual
design, production scheme and the actual usage of a product or service.

12. 3. Pay attention to the Consumption Ecosystem
• When using a product, consumers
connect a product with other products
and services to deliver unique value that
meets their needs. Such inter-connectivity
is referred to as consumption ecosystem
• User-driven innovation and APIs facilitate
such connections

13. 4. Learn from agile experiments (APIs)
• Innovation requires two things: the ability to try a lot of experiments, and
not having to live with the collateral damage of failed experiments.

14. 5. Use digital engines
• Cloud computing (AWS)
• AI-as-a-service
• Core assets-as-a-service
• Explainability
• Smart digital assistants
• Learning objects

15. 6. Implement dynamic decision architectures
Where do you place decision rights?
• When do you service a car?
• Determine best route?
• Where to stop for gas?
Centralized, decentralized or distributed
Products that learn and adapt while in-use

16. 7. Be Part of an Ecosystem
From resource control to resource orchestration
• Platform
• Integrator
• Component provider
• Orchestrator
Interlocking Ecosystems
Amazon in healthcare, entertainment, retail and infrastructure

17. Major considerations
• Data Privacy
• Ethics of data use
• Security
• Bias in algorithms

18. What can you do?
• Learn from the titans
• Create own list of lessons
• Learn how to learn
• Create a digital identity
• Become a digital innovator
18
Become Digital Innovators